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Quest Means Business
Trump Gains on Clinton in New Polls; Clinton Leads CNN Electoral College Projection; Top economists Slam Trump in Open Letter; Britain Bolsters Cyber-Defenses; U.K. and U.S. Accuse Russia of Cyber-hacking; Obama Campaigns for Clinton in Ohio; Moody's Model Predicts Big Election Win for Clinton;
Aired November 01, 2016 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[17:00:00] RICHARD QUEST, CNN ANCHOR: Closing bell rang an hour ago on Wall Street. You had an hour to contemplate the fact of the Dow Jones fell
more than 105 points. A very bad day for stocks. And that is a classic definition of a firm gavel. Not robust, a firm gavel on Tuesday, it's the
1st of November.
Seven days to win the White House. A new poll is showing that Donald Trump is gaining on Hillary Clinton. We have full analysis tonight. A group of
U.S. economists say Trump hasn't done his homework. This year's Nobel Laureate is on the program to tell us why he didn't like what he hears.
And Britain spends billions on fighting cyber-attacks with a wary eye on Russia. I'm Richard Quest live in New York and I mean business.
Good evening. This time next week, Americans will be at the polls, even though there's early voting under way at the moment. But the election day
itself is in seven days' time. And new poll numbers suggest more and more of them are ready to vote for Donald Trump. The Republican nominee is
ahead by one point in the latest ABC/"Washington Post" poll. Now, Mr. Trump hasn't taken the top spot in that poll since May.
This time four years ago, Mitt Romney had a one-point lead in the same poll and went on to lose the election. So, I'd caution the caveat, it is one
poll, but it's certainly energized the election in this last few days. It has cut into Hillary Clinton's lead in our CNN poll of polls. She's now
only four points ahead. So, we need to put this into some perspective. We need to find out where this election will be decided. And to do that, we
look at where the candidates are campaigning in these final days.
Hillary Clinton is in Florida, she's back in Florida. She was there last week. This time she's with her husband Bill and daughter Chelsea.
President Obama is pitching in as well. He is due to speak in Ohio, within this hour that we are together. If he's there and if he says something
interesting, then we'll certainly bring it to you. Now, Donald Trump started the morning in Pennsylvania with his running mate, Mike Pence. And
he's moving to it another battleground state in Wisconsin, in two hours, using the final days to call for the break from the president's policies.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: Americans are tired of being told to defer their dreams to another day. But politicians, for
the most part, really mean another decade. Because that's what they're talking about. Enough waiting, time is now.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
HILLARY CLINTON, U.S. DEMOCRATIC PRESIDENTIAL CANDIDATE: I want to make sure that every voter in Florida spends these next seven days, thinking
about what's at stake in this election. Because honestly, I believe this may be the most important election of our lifetimes.
(END VIDEO CLIP)
QUEST: Time and time again, you have heard me say on this program, it doesn't matter how many votes they get. It matters where those votes are.
And the reason for that is because of this strange, political beast in the United States. It's known as the electoral college, which has its roots
deep in American history. Basically, the founding fathers didn't trust people to vote for the right person for president. So, they gave them the
vote, but people voted for these mythical, or these electors who could be relied on to do the right thing.
Well, that's what it was like when it all was set up. But in today, in 2016, this is how it works. Every state in the United States is given a
certain number of electors in the electoral college. And the way you get to that number is both between geography and population size and equality.
You're balancing the two, geography for big states with big populations, and equality. For those states to make sure everyone's equal.
{17:05:00] So, the number ins, the way they work out, every state is given electoral college members, which adds up their two Senators, equality and
number of Congressmen, geographic and population. This shows the story perfectly. Let's take a state like Florida down here at the bottom.
Florida has two Senators and 23 Congressmen. Therefore, it has 25 congressmen, therefore, it has 27 electoral college votes.
Let's go to Texas. Look at Texas. Two Senators and 32 Congressmen, gives it 34 votes. But remember I talked about equality. Alaska, get down here,
Alaska, two Senators, one Congressmen, three electoral college votes. The totality is 538. And what they are trying to do, the politicians, Hillary
Clinton and Donald Trump, is get beyond 269. 269 gives you a draw. 270 gives you a victory. We'll talk about a draw in a moment. 270 gives you
that victory. And that's why you see this map as you see it today. You're aiming for those states, you're aiming for Arizona, for Nevada. You're
aiming for Florida, for Ohio, possibly Pennsylvania, certainly, North Carolina. You're aiming for those states where you can still grab the
electoral college votes.
We'll come to Anna Navarro in one second, to give us perspective on this, but bear in mind if you're a Republican, you don't campaign in Texas.
You're going to win it anyway. If you're a Democrat, you don't really campaign, for example, in California or New York too much. You're going to
win it anyway. So, you go to those places where you're going to pick up the electoral college. Anna Navarro is with us. Anna, I need your help.
Did that make sense on the electoral college? Because as I understand it, a large number of Americans still wonder why on earth you have this
complicated construct.
ANA NAVARRO, CNN POLITICAL COMMENTATOR: Let me tell you, that was such a good explanation, I want a link of it. I want it dubbed into several
languages and I want it with me every time somebody asks me to explain the electoral college, because it is very difficult to explain. And it has led
to some circumstances where one candidate wins the popular vote, one candidate wins the electoral college vote, and we go with the electoral
college. Leaving a lot of people very unhappy.
QUEST: But as we see and I've now got my map up that I can show and I can manipulate. If you look -- I mean, it's a blank map at the moment, so tell
me, where do the candidates need to go at the moment? Where should they be looking at?
NAVARRO: Florida, Florida, Florida. Ohio is a big one. Pennsylvania is probably in Hillary Clinton's camp. I think Arizona, you're going to see a
lot of activity by the Clinton campaign in Arizona, because though it is traditionally a Republican state, it looks like it is tighter than usual
this time. It might be winnable for Hillary Clinton. You're going to see some small ones, but important ones because they are still swing states.
You're going to see folks going to Nevada. You're going to see folks going to North Carolina. So, it's all up in the air. At this point, the
electoral map is still giving Hillary Clinton the lead. She still wins the polls when it comes to the electoral map, which is why Donald Trump is
trying to find himself some other path.
QUEST: Let me jump in there, because I put those states that you've just mentioned, most of them on the map. But if I look at the 2016 map at the
moment and we reflect on that, the reality is, because of the electoral college and this strange beast that it is, it does work rather well in a
sense. Because it is forcing the candidates to go to different parts of the country rather than just campaign in the main populous.
NAVARRO: Absolutely. And in some of those swing states, it's not only a state. I would tell you it's different microcosms within a state. In my
home state of Florida, the panhandle is as different from Miami as you can possibly get within the same state. Forget the same state, within the same
country. And so, it does force candidates to go speak to different audiences, to different demographics, to different age groups, to people
with different interests. Sadly, Richard, despite all that, these last few days of this campaign and probably most of this campaign has been a policy
devoid discussion.
{17:10:04] We are arguing about things that have very little to do with the top interests of those different demographics.
QUEST: Now, as we pull this together, this poll, this ABC poll that has Donald Trump one point -- now, let's ignore the margin of error and let's
just say for argument sake, the poll is accurate and is repeated elsewhere, but 1 percent -- or a lead of 1 percent nationally can be irrelevant when
you look at the electoral college and pass it down to the individual states, is that right?
NAVARRO: That's absolutely right. You know, really looking at these national polls gives you a general idea, if you'd like, trend lines of
where things are going, how things have shifted. I think those FBI story has shifted the narrative in the polls in the last five days, but it
doesn't give you the full scope. You've to focus on the electoral college. How to get to 270? That's the magic number. That is the single focus
goal.
QUEST: Ana, good to see you, and thank you for helping us understand.
NAVARRO: I tell you, Richard, I think you are better than any social studies teacher I ever had. If this TV thing doesn't work out for you,
man, you've got a future in social studies education in the United States of America.
QUEST: Just don't ask me to find Indiana, Idaho, or Vermont on the map within five seconds. Good to see you, Ana, thank you.
OK, so whilst we know what the map looks like, and we'll keep this map in our minds throughout the course of the program, because you really do have
to understand. You've got to understand it's not how many votes you get. It's where the votes are, and when you're watching my colleagues Wolf and
Anderson and co on election night, I need you to remember this map and where they're going. But we carry on.
Looking at 370 economists, including several Nobel Prize winners, have signed an open letter, urging voters not to elect Donald Trump. Now the
letter accuses Mr. Trump of misleading the public about issues like trade and the deficit. So, it reads, for example, "Donald Trump is a dangerous,
destructive voice for the country. If elected, he poses a unique danger to the functioning of the democratic and economic institutions and to the
prosperity of the country." I think the best bit, "He's misled the electorate. He promotes magical thinking. He has misled the public. He's
misled the voters and he degrades trust." Oliver Hart is of the people who signed it. He's also the 2016 Nobel Economics prize winner. He joins me
from Cambridge, Massachusetts. Sir, delighted to have you on QUEST MEANS BUSINESS. Thank you for taking the time. Why did you sign the letter?
OLIVER HART, 2016 NOBEL ECONOMICS PRIZE WINNER: Well, because I'm seriously worried, like many of the -- my fellow economists about the
possibility of a Trump victory. I think it would be very dangerous for the country.
QUEST: But if that is a victory that takes place, I mean, as I -- I suppose -- how do you hope to influence the decision as a result of that?
Because a lot of what you say has been well documented before.
HART: That's a good point. I don't know whether it's going to persuade the people who need to be persuaded. But I think it is unusual for so many
economists with views across the board to sign a letter like this. And I suppose a lot of us just felt we had to say something.
QUEST: Do you believe it is an issue, for example, of the deficit, of trade, or as you suggest here, that he is ignorant -- your exact words
were, he's ignorant about economics?
HART: I think it's all of those. I think -- I mean, I've heard Donald Trump say many things, and you know, he talks like a businessman all the
time, but he doesn't show any real understanding, as far as I can see, for economics or how -- for how you run a country and what you can
realistically achieve.
QUEST: Throughout this campaign and this long campaign, here on QUEST MEANS BUSINESS, we've continued to try and parse the numbers. But the
reality is, the Trump side always says that their policies would create growth in a trickle-down economics, a la Ronald Reagan 20, 30 years ago.
Why are they wrong in your view?
{17:15:00] HART: Because I think that's just a hope. I mean, I've read the platform. Donald Trump calls for more growth and you know, he says
we've got to have faster growth, growth is terrible. Trade agreements are terrible. I'm going to rip them up and start again, and all this sort of
thing. You can say those things, but it doesn't mean that you can actually bring them about. How do you bring about more growth? We've tried cutting
taxes and that usually doesn't work. I think many economists think that taxes in the U.S. are too low and that we need to increase them. We have
major problems with the deficit looking forward. And we need higher taxes, not lower taxes. Donald Trump wants to reduce taxes for the rich and he's
just assuming that's going to help other people. There's absolutely no evidence for it.
QUEST: So, did you have to think long and hard before you signed up to this? Did you have to consider -- let's face it. At the end of the day,
if he wins, you've just written a letter and will be on the wrong side of the equation.
HART: Well, I think -- yes, I -- even if he wins, I don't think he's going to control Harvard University or my job, I hope not. I certainly read this
letter very carefully, because although I don't approve of his economic policies, I'm not going to sign something which has criticisms that I don't
agree with. I read each paragraph and I agree. I agree about the magical thinking. I agree about his attitude to trade. I agree that I don't think
he can turn the clock back on automation. I mean, the point is that what's going on in this country is part of what's going on in the world as a
whole.
Even the United States, which is the most important economy in the world, is still only about 16 percent of world economic output. It can't control
what's going on. There are forces out there which are beyond any person's control. Including new technology. And a lot of the things we're seeing
with respect to jobs are the result of technology, not trade.
QUEST: Thank you, sir. Mr. Hart, thank you for joining us. And by the way, Mr. Hart, congratulations. We had your co-winner on the program, the
day that you won. Congratulations, sir, lovely to have you on the program.
HART: Thank you very much.
QUEST: Now, as we continue, we're going to go from the election to no sitting boss of MI5 has given an interview in 107 years. Now Andrew Parker
is speaking up and issuing a stern warning about Russia. In a moment.
(COMMERCIAL BREAK)
{17:20:00] QUEST: Britain's vowing to keep up, in their words, with the growing threat of hacking and it's promising to invest enough resources
with which to do it. It doesn't matter whether you're talking about hacking with a computer, or a webcam, or an iPad or tablet, or whatever
household device there might be does du jour. The finance minister, Philip Hammond, has announced he's nearly doubling spending on cyber security --
in his words -- to stiffen U.K. defenses and protect privacy in British boardrooms and living rooms. The chancellor says the more devices we
connect like these. The more vulnerable society becomes. And the U.K. must be able to strike back after an attack.
(BEGIN VIDEO CLIP)
PHILIP HAMMOND, UK CHANCELLOR OF THE EXCHEQUER: If we do not have the ability to respond in cyberspace, to an attack which takes down our power
networks, leaving us in darkness, or hits our air traffic control system, grounding our planes, we would be left with the impossible choice of
turning the other cheek and ignoring the devastating consequences, or resorting to a military response.
(END VIDEO CLIP)
QUEST: Now, as accusations of cyber hacking are swirling, whichever way you look, it would appear, in the eyes of some, that Russia is continually
at the center of the accusations. It seems all roads lead to Moscow. In a rare interview, the head of Britain's internal security force, the MI5 has
called out Russia for using propaganda, espionage, subversion, and cyber- attacks, so says the U.K., to attack its foreign policy goals.
In the United States, Russia is standing accused of hacking and leaking the emails of the top Democratic Party officials. That's caused a major
scandal for Hillary Clinton. The Obama administration has said publicly and repeatedly the Kremlin intended to interfere in the U.S. political
process.
And the Clinton campaign itself insists that Donald Trump has ties to Moscow through banking and otherwise. They say the FBI's investigating,
but refusing to make a public connection between the two, between campaign and Russia. Now the Kremlin, for its part, is denying it all. So, I was
joined earlier by Iain Duncan Smith, a former member of the government and now a member of the Parliament in the United Kingdom. If geopolitical
interference is part of what you might call a new cold war.
(BEGIN VIDEOTAPE)
IAIN DUNCAN SMITH, MEMBER OF UK PARLIAMENT, CONSERVATIVE: There is at one level state-based interference, cyber interference, and that is definitely
the case. I think you'll find that the USA and the U.K. do it in a more defensive manner, which is to say, checking and watching to see what areas
have been stolen or retrieved from their areas. What kind of intelligence? What kind of technological advances are in certain of these states that may
at some stage pose a threat to them.
But I think what the difference is, in the case of Russia particularly and probably China, theirs is a much more aggressive and offensive style. A,
partly looking for technological advances and secrets, and secondly really, constantly trying to manipulate and involve themselves in that decision-
making process that may ultimate affect them. I wouldn't call it a cold war. But you know, I would remind you that the -- if you read any of the
Tinker Tailor spy novels, or anything else of that period. You know, they talk about leaving messages in dead letter boxes, in tins in strange
houses. That doesn't happen anymore. What actually happens is, they hide stuff in plain sight on the web. And that is the modern equivalent. It's
much easier to get into systems than it was before. So, it is the classic defense and offense that goes on. But there's national security and then
as I said, probably the biggest single threat to everybody else is criminal behavior, and that's huge. It's an enormous business.
QUEST: The whole question of cyber security and what it means, and let me put it bluntly, the blaming of the Russians to some extent, there will be
those who say, yes, it's a convenient target to blame the Russians or the Chinese, to create a baddie that nobody can prove or disprove.
SMITH: I don't think that's the case. I think the Chinese have -- they don't quite admit it, but they've been up to it for ages and ages and ages,
and testing our systems, our security systems. You know, it's legitimate in a sense, you could argue, for one nation that's not directly allied with
another, to do that, to ensure, therefore, that you keep them on the defense. I can understand why they're doing it. I think it would be
better if they didn't do it. But in the case of Russia, I have to tell you, I do have more than just misgivings. There's no question now that
there is partly a state-sponsored approach which is very damaging.
But the very fact that all these -- so many of these criminal organizations, if you talk to any of the security people, they will tell
you that the world's biggest global hub for criminal cyber-attack is based in and around Russia and particularly around Moscow.
{17:25:00] And nobody can tell me that a multibillion pound industry, which is what it is, is sitting there because nobody in Russia knows they're
there. It's quite clear and obvious that you must take it from that, that there is a blind eye and maybe a large back pocket being filled on the
basis that they can stay there. And I simply say that this is the most intolerable part of it, which is a kind of rogue nation state in a sense,
in the way they operate, allowing tacitly these characters to operate from within their environments.
(END VIDEOTAPE)
QUEST: Ian Duncan Smith, our correspondent, Claire Sebastian, is in Moscow for us this evening. So, the Kremlin repeatedly says the West is paranoid
and that there's no truth to these allegations. But what do they tell their own people about these allegations, if anything?
CLAIRE SEBASTIAN, CNNMONEY CORRESPONDENT: Well, Richard, they tell their own people the same thing that they tell us. They're basically shrugging
it off. Even in some cases, laughing it off. We heard from the Kremlin spokesperson, Dmitry Peskov, today specifically on the issue of cyber
hacking from Russia, and he said, look, we've commented on this multiple times. Including when it comes to hacking in the U.S. There is no proof.
We haven't seen any proof. He said, either from MI5 or he mentioned the U.S. vice president who we know has threatened a response, or hinted at a
response from the U.S. He said, until we see proof, we really are going to see these allegations as baseless. So very much the Kremlin shooting down
any suggestions today from MI5.
QUEST: Right, but does anybody, with the exception of the kremlin, does anybody in Russia, amongst the intelligentsia, believe them?
SEBASTIAN: In terms of believing whether Russian hackers are actually involved in overseas activities. Look, Richard, I've spoken to a number of
people in the Russian hacking community, the Russian-speaking, hacking community. And they say this is very much all about profit. This is a big
element in Russia, as you've been reporting, as Ian Duncan Smith was just saying. They operate on forums. They sell viruses and botnets. It's all
about the money. The hackers or former hackers that I've spoken to, say if there's any involvement in state sponsored hacking, there has to be a money
trail somewhere in that. So, Richard, that is what we are looking at the moment.
QUEST: And I expect you to come back and report more about it not before too long, Claire. Get back to your duties. Claire Sebastian who's in
Moscow tonight. Now let's put this into some full perspective. Joining me in the C-suite this evening, Gadi Evron. Good to see you, sir.
GADI EVRON, FOUNDER AND CEO, CYMMETRIA: Hello, sir.
QUEST: So, the Russians are doing it. If it's not the Russians, the Chinese. Can we prove it?
EVRON: Yes and no. Not all of these questions can be just binary answered with "yes" or "no." A few years ago, it was all about the Chinese. Now
it's all about Russia. It's all about the politics. The thing is, it's not necessarily that politics dictate who we aim our accusations at, and
it's very, very to reach retribution in cyber security, but rather, it is about politics. When you look and I'm no Russia expert and I'm not going
to blame Russia in any way, but when you look at the way Russia operates probably in cyberspace, it's all about policy goals.
QUEST: Right. But somebody is doing this, correct?
EVRON: Yes.
QUEST: And from my understanding and I know a great deal less about it than you, the level at which it is being done, and the sophisticated nature
does suggest some form of state involvement, would you agree?
EVRON: Absolutely. You need to understand. This is an eco-system. You have what we call script cadence, activists. We have nation states. I've
personally done research and my company and other companies have done research that showed there is very little doubt these are nation states.
There's very little doubt some of these are Russia, some of these are China. But we have to be very careful when pointing fingers. The
technical data always needs to be double-checked.
QUEST: So, when did the British decide to spend 2 billion pounds --
EVRON: When they panicked. Which they probably should have a long time ago. The thing is, what do we actually do about all this? When we see
Russia, if we go to the policy level, when we see the potential Russian attacks, when we see the potential Chinese attacks, these are -- the
Chinese attacks are about immediate gains, economic gains, I want to steal this, I want to steal that. When you look at Russia, it's very likely to
be policy level. It powers their engine of policy. Of, for example, propaganda, information. It's not about cyber. It's not about data. It's
about the idea of policy, but strategy. Cyber is just another tool.
QUEST: Are we powerless against that sort of ambition?
EVRON: We are not powerless. But we should be careful with empty statements. We're in an asymmetrical situation. Let me break it down
quickly, because I don't like buzzwords. They are more powerful than we are. They are dynamic. We have to protect everything all the time. They
have to be successful once. The thing is, we know in the defensive side, if they want to get in, that I will manage to do it. That is very
frustrating.
QUEST: Good to see you, sir.
EVRON: Good to see you.
QUEST: Thank you very much indeed.
EVRON: Thank you.
QUEST: We continue tonight, whether it's cyber security, or indeed the elections, President Obama today has been campaigning for Hillary Clinton
in Ohio. We'll have the pictures and if he's on time, which he won't be. This is a live feed, by the way, from Ohio. Fired up and ready to mot. If
he spokes in our time we'll bring it to you and if he doesn't, we won't. We're QUEST MEANS BUSINESS.
{17:30:00] (COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. Of course, there's more QUEST MEANS BUSINESS in just a moment. We're going to hear from Donald Trump's
economic team after hundreds of top economists have declared that he's dangerous for the United States.
And the chief executive of YouTube will tell us why she's supporting Hillary Clinton even if her company isn't taking a stance. Before that,
this is CNN and on this network, the news always comes first.
One week to go in the presidential election and a new poll indicates Hillary Clinton and Donald Trump are basically locked in a dead heat. It's
the ABC News/" Washington Post" tracking poll that puts Mr. Trump up by 1 percentage point. His first lead in that poll. However, as you rapidly
realize, it is well within the margin of error. CNN's poll of polls still shows Clinton four points ahead, 46-42.
Iraqi forces have made their way to the eastern outskirts of the city of Mosul, despite snipers, land mines, and boulders blocking the road. They
took control of the last populated village outside of the city. They're now working to clear any explosives left behind by ISIS.
There's been violence in Kashmir as India and Pakistan are now reporting 13 deaths in cross-border shelling. It had happened on both sides of the line
of control, which is the de facto border in this disputed region. These deadly clashes come during a time of heightened tensions between the two
countries.
President Obama is in Ohio and so is our White House correspondent Michelle Kosinski, in Columbus with the president. Has he started speaking yet?
MICHELLE KOSINSKI, CNN CORRESPONDENT: Hi, Richard, it sounds like he's coming out right now. Yes, here he is, you can probably see him behind me.
{17:35:00] You can see him waving to the crowd. I don't know if you're going to take his speech live, but his message today obviously in the final
days of this race, is that as he's speaking to this adoring crowd for him, he wants people here to be as excited for Hillary Clinton as they are to
cheer him. But he's been busy in these final days. We saw him make a number of appearances last week. Now this week, he's going to make his
second appearance today in Ohio. His third appearance in North Carolina. Let's go.
QUEST: Michelle, I will save your voice, competing against that. And we'll listen to the president for a second or two.
BARACK OBAMA, U.S. PRESIDENT: O H, O H. It's good to be back. USA, USA, USA.
CROWD: USA, USA, USA.
OBAMA: Let me just first of all, let me ask a question here. What did everybody have to drink before you came in here? You guys had something
caffeinated because you seem pretty fired up. You seem like you're ready to go. You seem fired up, Ohio. Let me begin by first of all thanking
your outstanding Congresswoman Joyce Beatty for that introduction. You've got Mayors Ben Kessler and Andrew Guenther here. Your next United States
senator, Ted Strickland.
Let me ask a sensitive question for a Chicagoan, how many Cleveland Indian fans in the house?
[CHEERS AND APPLAUSE]
I just want you to know that you don't have to worry because we will get you out of this auditorium before the first pitch. So, you're all good.
And --
QUEST: Michelle Kosinski, if you can still hear me and talk over the roar of Ohioans, with the President, Michelle, how significant is it that the
campaign has sent him to Ohio?
KOSINSKI: Well, this is one of those key battleground states. In fact, some consider this a must-win for Donald Trump. And this place is
particularly interesting, especially when you think about back when that Donald Trump audio tape came out, the Access Hollywood tape, Hillary
Clinton's lead over Trump here by some polls accounting by nine points. Well, now hit has shrunk and in fact, in the latest polling Donald Trump
has actually overtaken Hillary Clinton by a point or two. It's still within the margin of error. But that's how critical the race has become,
not just here in Ohio, but in a number of states. So, that's why President Obama is here.
You can see now in these final days, the Clinton campaign working directly with the White House, to figure out where President Obama will be most
effective, because he is arguably her strongest voice on the campaign trail. It's not Bill Clinton, the former president. It's Barack Obama and
his wife, the First Lady. So, they want him to be in these key states. He's going to make a number of appearances this week. And it's
interesting. In that planning, which usually the White House does weeks out, they're now turning it around to days before an appearance. And the
Clinton campaign, in fact, changed his locations for this week three times in one day. So, they're looking at where the numbers are closest, where
his influence can be the most effective. And they're telling the White House, send the president there on this day, Richard.
QUEST: And just watching, listening to the bit that we've heard, Michelle, he is still, by far and away, campaigner number one.
KOSINSKI: Yes, he is. In fact, people consider him to be the closer on this. His enthusiasm, the momentum that the campaign sees him bringing.
Even if you want to look at numbers, things like favorability rating. President Obama's is 57 percent, and it's been growing. Whereas Hillary
Clinton's is around 46. When you look at enthusiasm for voting, when president Obama was first elected, his supporters had a 79 percent rating
of how many people were very enthusiastic about voting.
{17:40:00] But right now, for Hillary Clinton, her supporters are around 54 percent. So, you see that gap in enthusiasm around the president, versus
the candidate. So clearly the campaign sees that, the White House sees that. They see how effective he can potentially be, so they want him out
there on the trail as much as possible, especially in the final days. That's when they think he can be most effective. It's not just making
appearances at rallies like this, as you say, speaking to the choir, it's doing radio appearances, on programs that are popular among African-
Americans. It's doing a lot of social media like Snapchat. Because in those areas where Hillary Clinton needs the most support, among young
people and among African-Americans, President Obama has that popularity.
QUEST: Michelle, if I had my hat on, I'd take it off to you for battling on against the Ohio crowd. Thank you.
KOSINSKI: Thanks.
QUEST: Michelle Kosinski who is in Ohio. We'll talk Trump economics after the break.
(COMMERCIAL BREAK)
QUEST: So, in just seeing live pictures of President Obama campaigning for Hillary Clinton in Ohio. Moody's said the president's high approval
ratings are one of the factors that will put Hillary Clinton into the White House. The Moody's model is predicting that Hillary Clinton will take the
key swing states of Florida, Ohio, Colorado, and Pennsylvania. We showed you the model in the program. And they're correctly predicted the winner
of every presidential contest since 1980. Heather long is here. Heather, is Moody's suggesting that -- upon what basis is the Moody's survey done?
HEATHER LONG, CNNMONEY SENIOR WRITER AND EDITOR: Right. So, it's not like a traditional poll of polls that we keep focusing on at CNN and other
outlets. It's an economic model at the end of the day. So, they're looking at things like, is gas cheap. How is the middle-class income
doing? How are home prices in the United States? And as we know, a lot of those economic factors have been getting better and better over the last
two years. People's pocket books are better. Are they great? You can have an argument about that, but they're better off than they were.
QUEST: And what does the Moody's study or model suggest?
LONG: Well, it's very good news if you're in the Hillary Clinton camp. Not only are they forecasting a Hillary Clinton win, they're forecasting a
pretty big blow-out. They actually go state by state and look at these economic variables. They're showing 332 electoral votes for Clinton and
only 206 for Trump. So, that's a pretty big win in the Clinton camp.
QUEST: For Moody's to be doing this in a highly controversial election, if they are wrong, it's egg on their face. But at the same time, it can be
quite a self-fulfilling prophecy, but it is unusual.
{17:45:00] LONG: It's a very risky proposition this year. And you're right, there's a big caveat on their report that came out today that said,
this is a very unusual, interesting, whatever adjective you want to use, year, and that the usual metrics might not apply. However, as you said,
they've predicted everyone right since 1980. And not just the winner, but they've predicted the vast majority of the states correctly. And not a lot
of models can say that.
QUEST: Now, you're being fickle with me, Ms. Long, because yesterday on this program, you had a survey that promised me that Donald Trump was going
to win by looking at a 2 percent fall in the S&P 500 since August.
LONG: That's right, Richard. Good point. So, we have two different metrics telling us different things. The stock market, based on that test
we looked at yesterday. It's been a 2 percent drop in the market since August 1st. That points towards a Trump win. But this economic model in
the improving economy in the United States, that's a good sign for the Democrats and for Hillary Clinton. Which one comes out on top? We'll know
in a week.
QUEST: There you go. It's extraordinary. Never seen anything quite like it. Heather, good to see you.
U.S. stocks fell sharply on Tuesday, arguably that's how they bring the stumps local. The one we were talking about. The Dow dipped below 18,000
and recovered just marginally in the final hour of trading and it closed with the loss of 105 points.
The Fed is meeting in Washington and has wrapped up the first day of a two- day meeting. Frankly, there isn't anybody, including the dog, that expects the Fed to raise rates until after the U.S. election. And there's now even
a growing body of support that says they won't even raise in December, and is now looking to 2017 thereafter for the first raise.
Europe and the tightening U.S. poll pushed stocks down. All the major indices were in the red. The worst was in Frankfurt, the Xetra Dax off 1.3
percent.
And it was a tale of two oil companies. A rise in profits pushed Shell stock nearly 4 percent up, and it was a similar amount 4.5 percent down
after profits fell by BP from by half from a year ago.
Earlier in the program, we talked a great deal about the 370 economists that don't like Donald Trump's policies. Betsy McCaughey is one of those
economists who does like them. And she is going to give as good as they've got, after you've enjoyed a "MAKE, CREATE, INNOVATE" moment.
(COMMERCIAL BREAK)
QUEST: As we told you earlier in the show, 370 economists have signed a letter, calling Donald Trump dangerous for the United States. Speaking to
me on this program, the Nobel Prize winning economist Oliver Hart, who won this year's Nobel Prize, said Trump talks a good game but lacks a valid
plan.
(BEGIN VIDEO CLIP)
{17:50:00] HART: Donald Trump calls for more growth and you know, he says, we've got to have faster growth, growth is terrible, trade agreements are
terrible, I'm going to rip them up and start again and all this sort of thing. But you can say those things, but it doesn't mean that you can
actually bring them about.
(END VIDEO CLIP)
QUEST: Now, Betsy McCaughey is a former lieutenant governor of New York and a member of the Trump economic advisory council and joins me now. They
say he has magical thinking and he is ignorant on economics.
BETSY MCCAUGHEY, FORMER LIEUTENANT GOVERNOR OF NEW YORK: Well, very few presidents are experts on everything. And in fact, very few are even
experts on anything, other than politics. But the fact is, he has a terrific economic team, supply-siders. And he has a very strong economic
plan, slashing corporate tax rates, deregulation, including repealing Obamacare, and most importantly, energy production, oil, fracking, natural
gas.
QUEST: But let me read you what they say. They say he degrades trust in vital institutions. He's misled voters about NAFTA. He claims to champion
former manufacturing workers, but has no plan. He's misled the public by saying manufacturing has declined when it hasn't. And he says he will
eliminate the deficit when actually it will increase.
MCCAUGHEY: Let me point out, first of all, that these economists are all academics.
QUEST: What's wrong with that?
MCCAUGHEY: Well, because 95 percent of campuses around the country are totally run -- I won't say run -- I won't say run -- monopolized by
Democrats. It's almost hard for a conservative like me to even stay on a college campus because we're so suffocated by the liberal political
correctness. So, talk to economists who actually work in business or in government, and you will get a different perspective. Now to the actual
issue. Donald Trump's plan to slash corporate taxes, which are now among the highest in the world.
QUEST: No, they deny that. They say, if you look, they actually specifically say that if you look at the tax ratio, amongst the OECD, it is
among the lowest -- and --
MCCAUGHEY: The OECD says that even after all the loopholes, it's 27 or 28 percent, which puts it way near the very top.
QUEST: The nominal rate, versus those after deduction, Betsy. That's apples and oranges.
MCCAUGHEY: I'm talking about the nominal rate is 35 to 39. The effective rate is 27 to 29, yes, the effective rate is 27 to 29, which is still way
up there. I saw the OECD report and the fact is Hillary Clinton demagogic promise to raise taxes on corporations will push us into a recession. Look
at what's happening here, Richard. We've had almost now four quarters of consistent decline in investment. When companies don't buy enough --
QUEST: Not in the last quarter. The last quarter it was an improvement.
MCCAUGHEY: Oh, it was like a sliver. When companies don't buy another truck, they can't hire another driver. When they don't buy another
computer, they can't hire another office worker. That's what's happening in our economy. Lack of business investment because taxes are too high.
QUEST: 370 of them.
MCCAUGHEY: It means nothing, because they're all from the same point of view. The academic point of view. Let's talk to people in real life who
know how to make money.
QUEST: That was my next story.
MCCAUGHEY: Now you have to wing it like me.
QUEST: Right, OK, you want to wing it, let's wing it. This question of the deficit, there is unanimity virtually.
MCCAUGHEY: I won't deny it.
QUEST: And it's going to rise as a result.
MCCAUGHEY: And you know what, that's Ok. The same thing happened under Kennedy. The same thing happened under Reagan. If you look at Reagan, who
produced many years of rigorous growth. By 1991, the deficit was coming down.
QUEST: Different times with lack of globalization and the U.S. economy wasn't as integrated. The U.S. economy today is 17 percent of the global
economy. It was greater in Ronald Reagan's time. Therefore, the need of overseas trading is greater today.
MCCAUGHEY: Now you're switching the topic to another issue, trade. But let me point out that although Trump's approach on trade is somewhat
controversial, protectionism. He has to get it through Congress. That's the one part of his economic plan that inevitably will be modified during
the legislative process.
QUEST: I can't remember what our bet was earlier in the --
MCCAUGHEY: I steak dinner.
QUEST: Was it a steak dinner? It's GDP growth, isn't it? We'll have to go back and look at the tape. Something tells me that I'll end up with the
bill anyway.
MCCAUGHEY: Looking forward to it.
QUEST: Good to see you. Thank you very much indeed. On this question of the economists, it's the subject of the newsletter, the QUEST MEANS
BUSINESS newsletter, it comes out after the closing bell and before Asia starts trading. And you can sign up for it at CNNMoney/quest. We'll have
a Profitable Moment after the break.
{17:55:00] (COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment, so what's left of my -- of the letter from the economists after Betsy had finished with it, but we have another
copy here, and it proves the point of how difficult it is for people to understand exactly what to make in the economics of this election.
On the one hand, you have a whole bunch of economists who basically say Hillary Clinton's policies are a disaster and would be dreadful for the
economy. Now we have 370 economists saying that his statement, Donald Trump reveals a deep ignorance of economics and is a dangerous, destructive
choice for the United States. Who to believe. And then you have Betsy McCaughey making a strong, full-throated argument in favor of those
policies.
It all goes to prove the old point, to economists, at least three or four opinions on what might happen, and they may all be wrong anyway. We saw it
with Brexit, where economist after economist came out and said dire and doom, and so far, it hasn't arrived. All of which leads me to basically
question what use these sorts of letters are from economists. I'm not sure how far they take us further in understanding. But fret ye not, a week
from today, within a few hours, it will all be over. And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever
you're up to in the hours ahead. I hope it's profitable, economist and all.
END
END
